Blockchain enabled letters of credit (L/Cs) have helped sustain trading despite disruptions caused by the coronavirus outbreak a senior banking official has told the South China Morning Post.

HSBC's regional head of global trade and receivables finance for Asia-Pacific, Ajay Sharma, says blockchain also reduces physical constraints to trade.

Facilitating trade

"L/Cs using blockchain have facilitated commercial trades amongst companies, even as the new coronavirus epidemic disrupts trade," Sharma said. "Leveraging blockchain for trade finance has overcome the physical constraints we are having today," he added.

Contour connections

HSBC is one of eight banks, alongside Standard Chartered, CTBC Holding, ING, Bangkok Bank, BNP Paribas, SEB and Citi, that are set to launch the Contour blockchain trade finance platform in Hong Kong.

Contour, the blockchain-based open industry platform formerly known as Voltron, has been operating as a fully commercial company based in Singapore since January (DC World News, 29 January 2020).

Mining giant Rio Tinto and trader Cargill, supported by HSBC Singapore and BNP Paribas, successfully completed the first fully integrated paperless L/C transaction in iron ore towards the end of last year (DC World News, 1 November 2019).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.